Don't let it get away!

Recent marketing initiatives by ExxonMobil (NYSE: XOM) are intended to make consumers more aware of the nature of the energy that they consume as well as its origination. In doing so, it hopes to make consumers aware of the strong points of fossil fuels like gasoline and natural gas while subtly pointing out the limitations of coal and non-traditional vehicle fuels like electricity. The even more subtle and likely unintended component of the advertising is that, in most cases, diesel can be interpreted as the superior fuel.

Energy density Compared to its peers, ExxonMobil remains almost completely vested in fossil fuels. While competitors like Total SA (NYSE: TOT) and Valero Energy have branched out a bit into alternative fuels like solar and biofuels, ExxonMobil remains stubbornly committed to its dominance in fossil fuels. Appropriately, it is quick to point out the advantages of fossil fuels over less traditional sources.

The quietly forgotten victor in the energy density discussion is diesel. Whether considering ExxonMobil-produced traditional diesel, green diesel, or biodiesel, the fuel carries about 11% more energy per gallon than gasoline. ExxonMobil plainly understands the science, and also recognizes a growing diesel economy. In its published Outlook for Energy: A View to 2040, ExxonMobil projects that diesel will be the top vehicle fuel globally by 2020, and that the gap between gasoline and diesel in North America will be drastically narrowed by 2040.

Where the energy comes from Given ExxonMobil's own projections, it is feasible that the percentage of the energy used in the U.S. that is produced domestically will remain at or above the 83% level that was realized in 2012. ExxonMobil reported increased oil and natural gas production in the third quarter of 2012, but if domestic, and to an even greater extent international, use of diesel as a vehicle fuel is to follow the predicted trends, then there is a clear opportunity for U.S.-based non-traditional diesel producers.

Biodiesel producers like Renewable Energy Group (NASDAQ: REGI) and FutureFuel Corp. (NYSE: FF) stand to see big gains due to increased demand for diesel fuel and also due to the potential for higher blending percentages. Companies like Valero Energy that are producing green diesel that can be used without blending requirements stand to see even greater gains as they grow their share of the diesel market from everyday consumers as well as consumers seeking renewable sourcing for their vehicle fuel.

Besides ethanol, diesel is the only fuel currently produced in relatively large quantities from renewable feedstock that has the potential to significantly replace its fossil fuel counterpart. Ethanol currently sits near its theoretical blending limits, which has in turn created a natural barrier for growth, particularly if gasoline consumption declines. On the other hand, biodiesel has blending room into which they can grow, while green diesel has no self-imposed growth limits outside of feedstock availability and production capacity.

The takeawayWhile ExxonMobil is fully capable of producing diesel fuel alongside non-traditional producers, the gradual replacement of gasoline as a vehicle fuel with diesel will enable more competitors to take a growing portion of the market share. Strangely, it doesn't seem overly threatened by non-traditional diesel producers, but as the global diesel market grows, a little concern on its behalf is appropriate. Long-term, biodiesel and green diesel are strong investments, and ExxonMobil may eventually become more vested in the associated technologies. I would think that ExxonMobil should see the writing on the wall, as it's the one who put it there.

America's energy boom is just getting startedThough diesel may not be ExxonMobil's best play, it does have a solid hold on oil and natural gas. Finding the right American energy plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.

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Shamus is a freelance writer for the Motley Fool focusing on energy, agriculture, and materials. He has his Ph.D. in Chemistry from North Dakota State University. After graduation, Shamus worked at a small biotechnology firm before becoming a professor of chemistry.